David Siu - Creative Commons
I recently took part in a short online debate about growth, responding to a piece by Rita Klapper and Paul Upham (the full debate can be found here). These are my thoughts, which can be read as a stand-alone piece though they respond to Rita and Paul’s interesting essay and, in particular, their concluding proposition that ‘growth’ is not something we should take at face value.
Why is growth such a problematic concept? After all, economists, politicians and business people talk about it all the time. To begin with, it’s because (despite appearances to the contrary) we really do lack an adequate vocabulary to tackle a phenomenon that’s so elusive, multi-layered, paradoxical and all-pervasive. Tim Jackson highlighted a good example in his (2011) study, Prosperity Without Growth: Economics for a Finite Planet. The French have at least got a term for slowing things down (‘decroissance’), whereas those working in English have to make to with the clumsy improvisation, ‘de-growth’ (OK, there’s ‘downsizing’ and ‘downshifting’, but the point still stands). Furthermore, the few words that we have at our disposal are shackled to, and frequently undermined by, misleading metaphors.
The images available – biological archetypes of growing organisms (like baby elephants) and evolutionary pathways – are particularly potent and need careful handling. Researchers have an important role to play here, challenging cruder examples of determinism and applying strong pinches of salt where necessary. But that’s not going to be enough. The destructive manifestations of economic growth that overshadow us today are a product of deeply-rooted cultural factors (with the possible exception of Rita’s collectively-minded Finns), underpinned by increasingly globalised economic and financial institutions. Fritz Schumacher’s inspirational (1973) Small is Beautiful: Economics as if People Mattered left one key question unanswered: how you deal with the dynamics? I’m not sure we’re much closer to understanding, for example, how today’s visionary start-up can avoid becoming tomorrow’s destructive corporation; issues like this should be at the heart of our research agenda. In his review of Jackson’s book, the solar energy entrepreneur Jeremy Leggett writes:
‘And for what it’s worth, as a creature of capitalism – a venture-capital-backed energy industry boss, a private equity investor, and an Institute of Directors director of the month – I am convinced that capitalism as we know it is torpedoing our prosperity, killing our economies and threatening our children with an unlivable world.’
Leggett thinks Jackson is good at, ‘showing the generalities of the escape route’, but there’s still plenty for the rest of us to tackle when it comes down to the details. Having said that, there are some great examples of experiments in alternative approaches to growth. For example, I recently attended a local entrepreneurs forum in Totnes (the Transition Town that has become known for its successful campaign against a Costa coffee outlet). As well as having a chance to mix with some really inspiring people, we heard about their local economic blueprint, part of a national pilot that is developing interesting new ways to conduct economic evaluation.
Richard,
Could you explain “deeply-rooted cultural factors”? and what do you mean by “how you deal with the dynamics?”?
Peter.
Peter
Thanks for the comment. Yes, this is a very short blog and I am missing out a whole lot of the detail. By ‘deeply-rooted cultural factors’ I’m referring to a broad research strand that includes the economist William J. Baumol’s (1990) article, Entrepreneurship: Productive, Unproductive, and Destructive. The basic idea being that entrepreneurial activity can take on economically, socially and environmentally destructive forms under certain historical conditions, but that these are often deeply-entrenched in our culture, insitutions and legal systems. The global banking and financial crisis of this century would be a case in point, as would our collective failure to address the growth in global carbon emissions. My point about Schumacher (but not just about his study) is that people often make propositions about a better way of organising things (e.g. by privatising state institutions or by creating new social enterprises to deliver local services), but they can have a very short-term perspective. In doing so, they can fail to take into account the new patterns of interaction (e.g. competition and collaboration between different organisational actors) that are being unleashed and the kind of growth that is going to arise as a consequence. In other words, by not thinking about these longer-term ‘dynamics’ (i.e. interactive changes) we may end up in a very different place to that originally envisaged. I hope that helps.
Richard
Thank you. Yes, those make sense.
As a follow up, can I ask the question as to whether we really need growth?…at some point even baby elephants stop growing. Though I have heard it suggested that our money system does require growth, since most money is created as debt/credit, and you need growth to pay the consequent interest. Is this correct or one of those half-truths from the mad money videos on youtube?
Assuming that it is correct, then does the answer to your question lie in the money system? though I should think that the question of the dynamics of any change here would be quite interesting (could one country fundamentally change how its money worked whilst the rest continued as previously?).
Peter.
This is an even bigger question and I don’t pretend to have an answer – and certainly not one that could be summarised in a few sentences! Perhaps the best thing is to point you to some recent publications in this area, which suggest how we might develop more resilient societies. Examples include Rob Hopkins’ very popular Transition Handbook and the Limits of Growth study, which has generated a lot of debate over the subsquent 40 years. There’s also been a lot of interest recently in the notion of a ‘circular economy’, which is the latest in a long series of design-led approaches (see also: ‘bio-mimicry’).